Internationalization, performance and firm specific advantage:The case of European automobile manufacturers

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Abstract:

The objective of this article is to investigate the internationalization-performance relationship in a specific industry (auto manufacturing) and in a specific geographic area (Europe). Indeed, even if over a hundred articles have been published on the effectiveness of international strategies, no consensus has been established in the literature. Some authors have recently highlighted the necessity to undertake case-based research within industries to overcome the limits of previous research and to better understand the relationship between internationalization and performance.
The research presented in this paper investigates the international strategies of the six major car manufacturers of the euro zone over a period of 11 years (2000-2010). We make a clear distinction between internationalization through export and internationalization through foreign direct investments, as we hypothesize that their impact on performance is different. We include R&D as a potential moderating variable of the multinationality-performance relationship.
The results of the study indicate that if exporting has a positive impact on performance, offshoring does not lead to superior performance. The study also shows that R&D influences positively the relationship between exporting and performance and negatively the relationship between offshoring and performance. Finally, thanks to an in depth analysis of the strategies of the six manufacturers, the research shows that the strategic positioning of the companies greatly influences the success of the international strategy.